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By Fergus Cleaver

It’s a big, wide world out there. Why not carve out some space for your business?

Even if you’re fortunate enough to do business in a big, prosperous country, expanding internationally is almost certain to grow your customer base—at least, if it’s done right.

And there’s the rub. Most international expansions fail because their architects drop the ball on the extensive planning, goal setting and scenario gaming necessary for any overseas gambit. If you’re not willing to put in more legwork than you ever thought possible—to cross your i’s, dot your t’s and pray that the chips all fall your way anyway—then it might be best to stick to your backyard.

For truly ambitious entrepreneurs, staying local isn’t an option. No matter what your company does or where it’s based, you need to do these things before you go global.

Make Sure You Have a Market

It’s every business owner’s nightmare: holding a sale that no one shows up for. To avoid this ignominious outcome, you need to do your homework—lots of it—ahead of time. Invest in local market research, analyze local and international competitors’ successes and failures, and speak with local business authorities who follow consumer tastes and trends. Remember: For every successful international expansion story, there’s a Target Canada debacle. Don’t be Target Canada.

Hire Local Talent

Buy local…talent. No matter how sharp your current team or how well you think you understand conditions on the ground in your target market, you can’t replicate a lifetime of insight or expertise. Before you go full-bore in a new country, make sure you have a solid team on the ground there—or, at least, an uber-competent local manager who can built that team from scratch.

Understand Local Rules and Regulations

It would be great if one set of business rules applied the world over, but that’s not always so. When you enter a new market, you need to be prepared to deal with a dizzying array of hard-to-understand regulations and customs. Some of these are “optional,” in that your business license won’t be revoked if you fail to follow them. Others, such as local tax regulations and labor laws, are not.

Raise Capital

You need to spend money to make money, and an overseas expansion isn’t your typical money-making endeavor. If you’re serious about doing things the right way, you’ll likely need to raise capital from your principals or investors before setting out. If this isn’t possible without overleveraging, hold off on expanding until your financial position is better.

There’s More?

You didn’t think this was all you had to do to launch your first international enterprise, did you?

This is just the tip of the iceberg. As noted above, it’s imperative for anyone considering an international expansion to speak with a raft of experts—peers, mentors, home country governmental authorities, trade organizations and overseas government contacts. There’s just no shortcut to international success. Doing it right means doing it the hard way. So get ready.

By Fergus Cleaver

Currency exchange rates are in the news a lot these days. Back in June 2016, when the United Kingdom voted to leave the European Union, the value of the British pound plunged against other world currencies, including the U.S. dollar and Japanese yen. People holding assets valued in pounds, or holding cash accounts denominated in pounds, collectively lost billions overnight.

How and why did that happen? The answer lies in the complex cause-and-effect relationships between the political, economic and even cultural forces shaping the global economy, and the subjective and objective public perceptions of the sovereign governments underwriting them.

Most people don’t know much about the ins and outs of currency exchange rates, nor do they understand how exchange rates fluctuations affect their daily lives. The good news is that a basic understanding of the relationship between global currencies, and the forces that make them tick, does not require an advanced economics degree. Here’s what you need to know—no fluff, just the facts.

Fiat vs. Gold Standard

Historically, sovereign currencies’ values were tied to the price of gold. For instance, back in the day, the value of the U.S. dollar was fixed at $35 per ounce of gold.

This arrangement suffered from systemic drawbacks. After manually adjusting the dollar-gold ratio, the U.S. government eventually abandoned the gold standard altogether. The replacement is known as fiat currency—basically, a dollar is worth whatever the government says it is.

Economic Strength and Weakness

Currency values serve as rough proxies for faith in the economic and political stability of their backers. For instance, the value of the euro declined precipitously (grew weaker) during the early 2010s, when it appeared that the European Union was in danger of collapse. The value of the U.S. dollar, whose backing government appeared more stable, rose (grew stronger) during that time.

Exchange Rate Effects

Exchange rates don’t just reflect the state of the broader economy—they can also affect it, both directly and indirectly. When a currency is stronger, its home country’s exports tend to cost more in international markets. When a currency is weaker, its home country’s exports usually cost less. Counterintuitively, then, a weak currency can actually be good for export-driven economies.

How to Calculate an Exchange Rate

Though they rarely fluctuate wildly in one direction or another, exchange rates are quite dynamic. They’re living, breathing simulacra of the broader economy. If you’re curious about the precise value of a particular currency on any given day, use an exchange rate calculator or check popular currency pairs with a reputable financial resource, like CNBC. (Yes, CNBC is reputable, if you ignore all the breathless headlines.)

Profitable Exchange

The answer to the inevitable next question: Yes, you can make money on the currency markets. The same basic rule of trading applies to currency markets, just as it applies to equity markets: Buy low, sell high.

The foreign exchange market is often known as forex. It’s a complex and fraught landscape, one that you shouldn’t dive into without professional guidance. Suffice to say that thousands of gutsy professionals earn very good livings on the forex market. With the proper training and mindset, perhaps you can too.